This is Community Wind
Lisa DanielsExecutive Director of Windustry
Financing Wind Power July 25, 2007
Outline
About Windustry Community Wind Energy Structure of Private/Farmer
Owned Community Wind Projects
Challenges for Community Development
What’s Next
Windustry Increasing wind energy opportunities
for rural landowners and communities. Non-profit organization based in
Minneapolis, MN www.windustry.org The Windustry Newsletter Wind Easement Agreements National Community Wind Conference Wind Farmers Network
“Yep, they make some noise, but it’s the soothing sound of money being made.”
Louis Woodward, Texas Rancher,Landowner
Prepared by Virtus Energy Research for Public Citizen and the SEED Coaltion
Community Wind Energy Defined
Simple and flexible concept Any number of turbines Connected either side of the meter one or more members of the local
community has a significant direct financial stake
KEY: Local ownership and local benefits
Benefits of Community Wind
All the benefits of large wind development, plus:
Greater stimulation of local economies
Increased local energy independence Delayed need for new transmission
lines Increased competition in energy
markets Greater acceptance of wind power
Community Wind Energy Success Stories
Farmer/Local Investors Local Utilities: Municipal Utilities
and Rural Electric Cooperatives Schools Tribal Communities Community Institutions New Models for Wind Industry and
Community Partnerships
Moorhead Public ServiceMoorhead, Minnesota
Two 750 kW turbines, installed in 1999 and 2001.
Public utility- used their own funds to purchase the machine.
Among the highest subscription rates in the nation and one of the early successful municipal projects.
Several good Iowa examples as well, including Waverly, IA.
Illinois Rural Electric Cooperative Pike County, Illinois
Planning a spring 2005 ribbon cutting for a 1.65 MW turbine.
Inspired by new IL wind maps that show some of the best wind in the state to be in IREC territory.
Turbine will generate about 4% of IREC’s power needs, close to the 5% limit in wholesale power contract.
Project supported by 3 grants (USDA, IL state grant, and IL Clean Energy Foundation) IREC Engineering
Manager and project leader Sean Middleton.
School Wind Projects: K-12Wind turbines can supply schools with clean
energy, new revenue, and learning opportunities.
8 school districts in Iowa have wind turbine from 50 to 750 kW
Spirit Lake Schools pioneered the idea in 1993 with a 250 kW turbine, followed by a 750 kW turbine in 2003.
Other school projects in MN, IL, CO, PA, VT, MA, MI, tribal communities
Spirit Lake, Iowa
Rosebud Sioux TribeRosebud, South Dakota
Dedicated a 750 kW turbine in May 2003.
Helped by DOE Tribal grant program and USDA RUS loan.
“Breaking Trail” First step for the ambitious wind
power goals of Great Plains tribes.
Project leaders Pat Spears and Bob Gough
Photo courtesy of Intertribal COUP
Lamar, Colorado Local project piggybacked on large wind project. Four 1.5 MW GE turbines less than 25 miles from CO
Green, a 162 MW project in Lamar Municipal Utilities (Lamar Light & Power and
Arkansas River Power Authority) timed their project to coincide with Colorado Green.
Coordinated with CO Green to lower development, construction and maintenance costs.
Minwind EnergyRock County, Minnesota
Minwind I and II: Two LLCs owned by 66 local
investors. Installed 4 950 kW turbines in
late 2002. Goals: local economic dev.,
maximize return on investment, diversify local economy Tom Arends and Mark
Willers, Presidents of Minwind I and II
Minwind EnergyRock County, Minnesota
Minwind III-IX: Seven more LLCs
owned by local investors.
Installed 7 1.65 MW turbines in late 2004.
Supported by USDA and Minnesota incentives.
December 2004 Open House at new Minwind turbines.
Developer
State EnergyOffice
Bankers
Minwind Board
Equipment Suppliers Minwind
CEO
Contractors
Investors
Accountants
Accountants
Lawyers USDAElected Officials
SMI & Hydraulics, Inc.Porter, Minnesota Photos courtesy www.smihyd.com
Federal Community Wind Incentives
PTC Hard to use it directly, need equity partner IRS Letter ruling
CREBS (Community Renewable Energy Bonds)
USDA Farm Bill Energy Title
Community Wind Incentives in Leading Midwest States
Minnesota: Production payment for projects under 2 MW. Standard tariff and power purchase contract for wind
projects under 2 MW. Iowa:
Iowa Energy Bank- low interest loans. Net metering- unlimited for matched loads.
Successful incentives address financing issues, provide access to capital, and/or strengthen the market for community wind.
More policy in 2005…2006…2007
New Community Wind Incentives in Minnesota and Iowa (2005 & 2006)
Minnesota: Community-Based Wind Energy Development (C-BED Tariff)
MN utilities required to establish a C-BED tariff based on the net present value of the energy.
Provides a long-term stable incentive for community wind projects.
Iowa: Tax Credit for Small Renewable Energy Projects(and expanded in 06)
For projects up to 2.5 MW owned by an Iowa resident, a farm operation or an electric cooperative.
Provides 1.5¢ per kilowatt-hour for 10 years for wind. Available for up to 90 MW of wind starting in July ‘06.
New Community Wind Incentives in Minnesota and Nebraska (2007)
Minnesota: Community-Based Wind Energy Development (C-BED Tariff) Refined No cap on the PPA rate
New Legislation for Nebraska C-BED
What do Community Projects Need?
Access to equipment New and innovative ownership
models Low cost financing Incentives that level the playing
field Market for energy Pathway to market
Project Cost Escalation Construction and equipment
costs up 30-40% in last 2 years Booming industry
• Turbines and towers, construction teams and expertise are scarce
Rise of price for copper, steel and other materials
Higher transportation costs Warranty contracts
Factors Driving the Market MN - Political pressure on utilities
Renewable Energy Objective (not a mandate) 800 MW goal of community projects from Governor’s
office IA – Incentives helping community projects
compete with large wind projects and other resources
State Renewable Energy PTC Low cost financing Project owns Green Tags
General Regulatory compliance (RES, REO, RPS, etc) Utilities beginning to see wind as stable long term
energy resource and a good investment Maturing of wind industry Familiarity with technology and industry players
New Transmission and Wind Resource Maps = New Planning Approach
Find maps and study report at:
www.windustry.org/dg
Study performed by CapX 2020 Utilities
Policy Opportunities
Energy topics are hot at both the state and federal level
Now is the time to open dialogue with elected
officials
Next Steps: New Legislation
One Example: US Senator Ken Salazar (CO) introduced s672 -
Tax Exempt Bonds for Community Renewables Letters of Support to Congress to urge:
Support of S.672 Consider sponsoring it as well
Addressed to Members of : Senate Finance Committee House Ways & Means Committee
On your own letterhead cc: : your own Senator and Salazar More info (www.refcoalition.com)
Today Wind energy is a huge business
opportunity With increasing constraints on regional
transmission systems Requires new thinking for bringing
about a new clean energy system Engaging local support is critical to
almost every aspect of this business Community wind has a vital
role.
Contact Windustry2105 First Avenue South
Minneapolis, Minnesota 55105
toll free (800) 946-3640 Lisa’s phone (612) 870-3462
fax (612) 813-5612 Lisa’s e-mail [email protected]
www.windustry.orgwww.windustry.org